Bank of America Securities: Lowering the target price of Hisense Home Appliances (00921) to HK$20.5 and lowering earnings per share

The Zhitong Finance App learned that Bank of America Securities released a research report saying that Hisense Home Appliances (00921)'s third-quarter results fell short of expectations. The bank lowered its 2026 and 2027 earnings forecasts per share by 26% and 7%, and the target prices for H shares and Hisense Home Appliances (000921.SZ) A shares were lowered by 12% and 13% to HK$20.5 and RMB 22, respectively, to reaffirm the “neutral” rating.

The third-quarter revenue and net profit of Hisense Home Appliances fell 9% and 74%, respectively, which meant that the first nine months were down 6% and 34%, respectively. Overseas revenue remained relatively steady, recording double-digit year-on-year growth, similar to the second quarter; the decline in domestic revenue widened from the low single digit in the second quarter to the middle double digits. Revenue trends are generally consistent with the industry, but profits are more volatile than leading peers.

The bank believes that Hisense home appliances are more susceptible to the property market cycle and cost inflation than their peers due to their weak profit margins and high exposure to central air conditioning. However, the related risks are already reflected in the valuation, which is equivalent to 7 times the projected price-earnings ratio and 7% dividend rate in 2027.